1.3m people to lose jobs in 'Austerity Budget'

Over a million people will lose their jobs due to the Government’s spending
cuts over the next five years, a leaked document projects.

George Osborne may find creating jobs is a tougher task than cutting Britain's Budget deficit

By Andy Bloxham and James Kirkup

6:30AM BST 30 Jun 2010

George Osborne’s Budget last week said that there would be a net increase of 1.3m jobs by 2015 but the Chancellor did not mention the figures used to arrive at that conclusion.

Last night, unpublished Treasury documents disclosed that officials had estimated 2.5m jobs would be created but that a total of 1.2m would be lost in the same period, the Guardian reported.

Both the public and private sector are expected to be hit, the analysis concluded, with the losses narrowly greater in the private sector.

The Treasury said it stood by the prediction that the overall number of people in jobs would rise over the next five years.

However, experts cast doubt on the private sector’s ability to be able to generate so many jobs in such difficult economic circumstances, meaning that the true gain in employment could be yet more modest.

John Philpott, the chief economist at the Chartered Institute for Personnel and Development, said: “There is not a hope in hell’s chance of this [increase] happening: there would have to be extraordinarily strong private sector employment growth in a much less conducive economic environment than it was during the boom.”

Brendan Barber, the TUC’s general secretary, said: “It is absurd to think that the private sector will create 2.5m new jobs over the next five years.”

An extract from a Treasury presentation for Mr Osborne’s budget – seen by the Guardian – said: “100-120,000 public sector jobs and 120-140,000 private sector jobs assumed to be lost per annum for five years through cuts.”

Alistair Darling, the shadow chancellor, said: “George Osborne failed to tell the country there would be very substantial job losses as a result of his budget.

“Hundreds of thousands of people will pay the price for the poor judgement of the Conservatives, fully supported by the Liberal Democrats.”

A spokesman for the Treasury said: “The OBR forecast unemployment to fall in every year and employment to rise in every year.”